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Anecdotal: Banksters Expecting Epic Hpc

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Had an interesting chat with a banking sector recruitment specialist the other day, he starts off telling me how they're all up to their old pay scale and more but just as i was starting to grind my teeth we get onto house prices and with no prompting from me he tells me how they're all selling up and renting, expecting epic falls in prices, not some 10-20% but huge falls, expecting to pick up million pound houses for "not very much". Basically we're talking the correction we've been holding out for all these years, the correction and overshoot.

It's just one guy telling me about some other guys opinions but its an interesting thought. VIs turning is always a good thing, just as cheering as hearing EAs talking about getting prices down to shift stock. Surly everyone in banking knows why prices are where they are, surely they know they are still massively over priced, they know the effect of tightening lending criteria, they should know it better than the regulars here.

Take from it what you will, i took it as a reminder and it's made me more determined to hold out for the overshoot, i'm not going to see a 10% drop from here and believe that's it.

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Had an interesting chat with a banking sector recruitment specialist the other day, he starts off telling me how they're all up to their old pay scale and more but just as i was starting to grind my teeth we get onto house prices and with no prompting from me he tells me how they're all selling up and renting, expecting epic falls in prices, not some 10-20% but huge falls, expecting to pick up million pound houses for "not very much". Basically we're talking the correction we've been holding out for all these years, the correction and overshoot.

It's just one guy telling me about some other guys opinions but its an interesting thought. VIs turning is always a good thing, just as cheering as hearing EAs talking about getting prices down to shift stock. Surly everyone in banking knows why prices are where they are, surely they know they are still massively over priced, they know the effect of tightening lending criteria, they should know it better than the regulars here.

Take from it what you will, i took it as a reminder and it's made me more determined to hold out for the overshoot, i'm not going to see a 10% drop from here and believe that's it.

Interesting.

I wonder how they can justify their top pay, given that the amount of profitable loans that they must be forwarding at the moment, if your source is correct, must be very low. If they are lending low volumes of money, into an asset class that is about to plunge in value, then there isnt going to be a lot of profit for them to divvy up as excessive pay. Unless they are taking what they can before the banks go pop, which begs the question, why are they recruiting?

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they're all selling up and renting, expecting epic falls in prices

Does that mean we are going to get a flood of smug STR banksters joining this forum? :o

:D

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Had an interesting chat with a banking sector recruitment specialist the other day, he starts off telling me how they're all up to their old pay scale and more but just as i was starting to grind my teeth we get onto house prices and with no prompting from me he tells me how they're all selling up and renting, expecting epic falls in prices, not some 10-20% but huge falls, expecting to pick up million pound houses for "not very much". Basically we're talking the correction we've been holding out for all these years, the correction and overshoot.

It's just one guy telling me about some other guys opinions but its an interesting thought. VIs turning is always a good thing, just as cheering as hearing EAs talking about getting prices down to shift stock. Surly everyone in banking knows why prices are where they are, surely they know they are still massively over priced, they know the effect of tightening lending criteria, they should know it better than the regulars here.

Take from it what you will, i took it as a reminder and it's made me more determined to hold out for the overshoot, i'm not going to see a 10% drop from here and believe that's it.

So not someone that works in banking or finance then? A recruitment consultant? hmmm

Well even if they're right, falls like that will cause something far worse than than a simple nominal drop in house prices. I'd rather have steady falls and a job, and i'd prefer not to have bars on my windows thanks

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Are these the same bankers that went bust?

If so I'd get long now..........

(It's more likely they can't get a jumbo mortgage any longer and their hubris prevents them from saying so)

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I've had many discussions along those lines with 'city' people.

but the issue now is how to preserve capital long-term to actually be able to buy, not whether prices will fall.

I get that, but hey, if you are getting positive returns relative to house price inflation, the preservation is of course easy until houseprices start to reverse their decline?

Even if you put the cash in a box, and houses are stagnant, you cash is not losing value relative to the price you must pay for the asset you cash is intended to purchase?

If i was to wager a guess, i think September 2014 will be a good time to get in, three years away, the beginning of the winter cold dark period, if you can hold out till then, i think you might get anything from peak up to 40% discount nominal..........

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Had an interesting chat with a banking sector recruitment specialist the other day, he starts off telling me how they're all up to their old pay scale and more but just as i was starting to grind my teeth we get onto house prices and with no prompting from me he tells me how they're all selling up and renting, expecting epic falls in prices, not some 10-20% but huge falls, expecting to pick up million pound houses for "not very much". Basically we're talking the correction we've been holding out for all these years, the correction and overshoot.

It's just one guy telling me about some other guys opinions but its an interesting thought. VIs turning is always a good thing, just as cheering as hearing EAs talking about getting prices down to shift stock. Surly everyone in banking knows why prices are where they are, surely they know they are still massively over priced, they know the effect of tightening lending criteria, they should know it better than the regulars here.

Take from it what you will, i took it as a reminder and it's made me more determined to hold out for the overshoot, i'm not going to see a 10% drop from here and believe that's it.

Yup, 30% to 40% nominal falls over the next few years, perhaps more with overshoot ;).

Has anyone else noticed how many seriously bearish articles from the main stream media have been linked to on this forum over the last few days?

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Had an interesting chat with a banking sector recruitment specialist the other day, he starts off telling me how they're all up to their old pay scale and more but just as i was starting to grind my teeth we get onto house prices and with no prompting from me he tells me how they're all selling up and renting, expecting epic falls in prices, not some 10-20% but huge falls, expecting to pick up million pound houses for "not very much". Basically we're talking the correction we've been holding out for all these years, the correction and overshoot.

It's just one guy telling me about some other guys opinions but its an interesting thought. VIs turning is always a good thing, just as cheering as hearing EAs talking about getting prices down to shift stock. Surly everyone in banking knows why prices are where they are, surely they know they are still massively over priced, they know the effect of tightening lending criteria, they should know it better than the regulars here.

Take from it what you will, i took it as a reminder and it's made me more determined to hold out for the overshoot, i'm not going to see a 10% drop from here and believe that's it.

and your banking recruitment mate didnt actually manage to join the dots that in such a scenario he and half the bankers will be in the dole queue?

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Eh I think we'll see falls, but not epic ones.

As soon as monthly rent is higher than (house price * average savings rate) / 12 there will be cash/btl buyers.

Let's say I have £200,000:

Do I a) put it in a savings account and get 4%, or £8,000 a year, or roughly £6,400 post tax.

Or do B) buy a house and rent it for £1,000 a month, gaining myself £12,000, or roughly £9,600 post tax while at the same time denying myself £6,400 from a savings account. Net gain being £3,200 in favour of the BTL.

I paid £161,000 for my new house (I'm a 23 year old FTB with a hard earned 30% deposit). Other houses on the street rent for £1,100 a month.

Even if I went home and lived with mommy - that mortgage is costing me way less than I could rent it out for. I've also got my eye on a flat with 7% yield.

What does it matter if the house is reduced in value to 1p? As long as the price of rent remains the same - I am making 7% a year on my original capital. Somehow I don't see rents falling enough to make BTL so unattractive that prices will plummet by as much as this website thinks.

average_460x297.jpg

graph_393x196.jpg

Edited by fadeaway

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Yup, 30% to 40% nominal falls over the next few years, perhaps more with overshoot ;).

Has anyone else noticed how many seriously bearish articles from the main stream media have been linked to on this forum over the last few days?

Wot? Like HPs to rise by 16%?

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Interesting.

I wonder how they can justify their top pay, given that the amount of profitable loans that they must be forwarding at the moment, if your source is correct, must be very low. If they are lending low volumes of money, into an asset class that is about to plunge in value, then there isnt going to be a lot of profit for them to divvy up as excessive pay.

I expect they are finding new ways to invent paper profit while low level lending to the housing sector is a requirement to look like they are doing what the government asks of them in exchange for the bail outs.

Unless they are taking what they can before the banks go pop,

there will always be banks for them to work for if they need to keep working

which begs the question, why are they recruiting?

I don't think this guy was necessarily recruiting new people into banking more like headhunting people between banks.

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Eh I think we'll see falls, but not epic ones.

As soon as monthly rent is higher than (house price * average savings rate) / 12 there will be cash/btl buyers.

Let's say I have £200,000:

Do I a) put it in a savings account and get 4%, or £8,000 a year, or roughly £6,400 post tax.

Or do B) buy a house and rent it for £1,000 a month, gaining myself £12,000, or roughly £9,600 post tax while at the same time denying myself £6,400 from a savings account. Net gain being £3,200 in favour of the BTL.

I paid £161,000 for my new house (I'm a 23 year old FTB with a hard earned 30% deposit). Other houses on the street rent for £1,100 a month.

Even if I went home and lived with mommy - that mortgage is costing me way less than I could rent it out for. I've also got my eye on a flat with 7% yield.

What does it matter if the house is reduced in value to 1p? As long as the price of rent remains the same - I am making 7% a year on my original capital. Somehow I don't see rents falling enough to make BTL so unattractive that prices will plummet by as much as this website thinks.

average_460x297.jpg

graph_393x196.jpg

if house prices fell by the sort of amounts envisaged in the opening post, rents would also collapse, mainly due to the extra couple of million unemployed, houseprices cant fall by any substantial amount without the destruction of credit money in the system, to destroy the credit money there needs to be a raft of bankruptcies the same as in 08

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I expect they are finding new ways to invent paper profit while low level lending to the housing sector is a requirement to look like they are doing what the government asks of them in exchange for the bail outs.

there will always be banks for them to work for if they need to keep working

i think youd find an extremely high correlation between bank employees and houseprices over the last 40 years, if one goes the other will face the same level of carnage

Edited by georgia o'keeffe

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So not someone that works in banking or finance then? A recruitment consultant? hmmm

Well even if they're right, falls like that will cause something far worse than than a simple nominal drop in house prices. I'd rather have steady falls and a job, and i'd prefer not to have bars on my windows thanks

Seemed to be fairly embedded in the banking circles rather than someone behind a desk in your local agency. I actually took him more seriously for what he was, seemed similarly cynical towards bankers as we are and just said it as "that's their new blag". Will they even try to deliberately crash the market once they've got their money out? Don't know what's possible or likely just seemed an interesting thing really.

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Thanks Athom, nice post, and great news.

(...) they should know it better than the regulars here. (...)

I agree, particularly on one crucial aspect, where we've been awful: TIMING !

They know it. We don't.

Great news that they are STRing now.

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and your banking recruitment mate didnt actually manage to join the dots that in such a scenario he and half the bankers will be in the dole queue?

aren't we hearing about the far eastern markets opening up to the banking sector moving their magic over there? Besides recent history has shown them that when they loose all that paper money with housing defaults the tax payer will pick up the tab and the banksters can just carry on with fresh ways to swindle us.

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I expect they are finding new ways to invent paper profit while low level lending to the housing sector is a requirement to look like they are doing what the government asks of them in exchange for the bail outs.

there will always be banks for them to work for if they need to keep working

I don't think this guy was necessarily recruiting new people into banking more like headhunting people between banks.

I am not so sure that there will always be enough money in banking to keep as many people employed as there were during the boom years.

I recall reading a piece from Robert Peston about Northern Rock. Since its demise, the good bank that they created is struggling, due, it appears, to not having enough volume of business to pay for the costs of its staff and buildings etc. You need to push out a certain number of loans through the door to pay for everything. I am sure that estate agents recognise that you need a certain volume of business to survive.

No bank is immune to this economic fact of life, and clearly the demand for credit is subdued. And the supply of credit appears to have been curtailed as well, I dont think banks are loading up serial bankrupts with a pile of new cash anymore. (I could be wrong about this). It was this huge deluge of money thrown at random that caused the boom, and the subsequent bust, and it flattered the banks who falsely marked the values of their loans. Now they are finding that those who did deceive in this way, are having to mark the loans down as the money isnt repaid. So now they are sticking to much safer loans. That means lower volumes, lower margins, and demands less people involved in the process.

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What would make rent fall? A lot.

Increased supply or falling demand, or a bit of both.

Net emigration, more housing, and end to SMI, and end to Housing Benefit, all would do the trick.

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Thanks Athom, nice post, and great news.

I agree, particularly on one crucial aspect, where we've been awful: TIMING !

They know it. We don't.

they hobnob with government and regulators, in other words

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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